9.15.22: Audio automatically transcribed by Sonix

9.15.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to your retirement Unbroken with your host. Merritt Strunk Merritt is a licensed fiduciary and financial advisor who always places your needs first. Merit works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here's Merritt Strunk.

Merrit Strunk:
All right. Welcome again to the Retirement Unbroken show. I'm your host, Merritt Strunk. And I am the founder and president of Momentum Financial and Insurance Services. And today for the show, we have Matt McClure, producer. What's going on, Matt?

Producer:
Hey there, Merritt. I am great. Doing fantastic today, as a matter of fact. How are you?

Merrit Strunk:
Oh, I too am fantastico. There's a lot of stuff going on here. But first we want to say thank you, thank you for being here on the show. Appreciate that. You could be doing any number of things, but you're here filling yourself with knowledge and information. And that brings us to the mission. The mission? Why are you here and what are we trying to accomplish? We want to transform our listeners into more educated, more equipped and financially savvy individuals so that they can make better financial decisions for their future. Each episode, we're trying to awake your mind in your spirit and give you tools and information that so you can act with intention, so that you can unlock what is possible in your financial future. And look, if you've never been to our website go to W WW retirement unbroken dot com and at the top you can see our phone number and also there's a button there it says complimentary consultation. Look, if this is right for you, then respond to us. Let us know. We'd love to talk to you. I talked to everybody who responds to that myself and we'll do a comprehensive, full retirement plan consultation with you. There is no obligation. You only work with us. If it's best with you, we'll help you analyze your specific financial situation. We'll help you look closely at different policies. You have different investment accounts, you have a41k IRA, other retirement savings accounts.

Merrit Strunk:
We can also talk to you about Social Security planning and Medicare. And we're going to hit a little bit on that later on in the show here. We're going to be talking about the Medicare situation and we'll compare your current situation to what's possible if you work with us. Look, if you haven't heard from your financial advisor lately with all this stuff going on, please reach out to us and get a second opinion. You know, I'll tell you, one of our listeners called in and also sent us an email. And, you know, she she was of an age. It didn't quite make sense to have all the risks that she did. And she said, look, you know, my Roth IRA that I had a certain amount of is now so much lower. I've called this big company, I've called this big company, and I can't reach anybody. She goes and she was very irritated. She's just it makes me sick. I'm so mad. And I'm like, Well, you're right. That is not the way it should be. And unfortunately, we do hear that a lot. Let's take a look at it and we'll tell you what you need to know. Quick question. I said, did you lose somewhere between 16% or more in the market recently? She said, yes. And I'm like, all right. And I knew instantly at her age, this is a little bit higher risk in which you would probably need unless there are other circumstances come into play here.

Merrit Strunk:
So please do that. Get a second opinion, get the information you need. It can only help you. Knowledge is power. We're going to hop into the market update. Boy, there's a lot going on. That was a that was a tough deal that we just went through. So what happened was inflation and news about inflation kind of rocked the stock market. And they're concerned that the Fed will go more hawkish than what the market is expecting. And the market was expecting somewhat of a lower inflation rate, inflation reading and report. And unfortunately, it got the opposite. It was higher than it expected. And so that did rock the market. So the major stock market indices held their morning gains, but not by much. Actually, it was just very modest. And so in the afternoon trading on Wednesday held near the highs of the day, investors are seeing a kind of mild day after the massive sell off yesterday. And it was the worst day in the market since June 2020. So the Nasdaq added about 0.7 upwards near a point, while the S&P gained 0.34. Nothing to write home about. The Dow Jones Industrial inched up 0.10%. Small caps held their own. The Russell 2000 index was 0.080. Again, nothing to grab a letter and write home about. The major indexes remain below their 50 day moving average after sinking below them yesterday.

Merrit Strunk:
And that was the big sell off day relative to our recording date here. So stock market squeezes out small gains and gas sees some strength. So crude oil rebounded 2.4%, trading at $89.41 a barrel. The Spider Energy ETF, that's XLE added about 3.3%. Natural gas gained up to 6.2% on anticipated tight gas supplies going into winter in the possible railroad strike. The railroad strike, have you heard it? Heard about that? All of a sudden, with everything going on, all the folks on the railroad think it's a pretty good time to go on strike. And they're probably right. They're going to get some attention here. Related to that, it's an amazing amount of goods and certain goods that are being distributed through railroad. The markets project about 74% chance that the Fed will raise interest rates by 75 basis points at this month's meeting, and 26% of the traders expect 100 basis points hike. So it's 74 or 26, 26%, something of 100 basis points hike. That's 1%. The source for that information. The CME Group's Fed Watch OC. So that that's as much as we're going to go into into that. But we are going to kind of decipher inflation and market fluctuation in just a second here. But right. Right before we do that, hey, Matt, what is the financial wisdom quote of the week?

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
Oh, I've got a good one for you this week here. Merritt It's from actually Dave Ramsey, who has, you know, another financial type guy who knows a thing or two about especially, you know, getting out of debt, staying within your means. Right. And so here is the quote that comes from Dave Ramsey this week. And it is it is human nature to want it and want it now. It's also a sign of immaturity. Being willing to delay pleasure for a greater result is a sign of maturity at your wage, not at your age, but at your wage. That kind of goes against my quote from last week, I think, which wasn't the official quote, it was the unofficial quote of the week, which is basically to paraphrase, Give me the money now.

Merrit Strunk:
All right. And we were talking about Social Security and about electing at the earliest age of 62. And your thought was, yes, I want money now. I love Dave Ramsey and I love his down home financial adviser. It's not a lot to argue with. They're like I've said before, and I love it when he says, you know, you live like nobody else, so that later on you can live like nobody else. Yeah. And some of those things he says, if you're in debt, you sell everything that's not nailed down and you eat beans and rice, you know, and I get it. Get out of debt, get it, get away with it. Because we talked about Jim Rohn a couple of shows ago. I want to this this one reminds me about Jim Rohn. I'm just going to share his quote again. And it just I don't know, it just coming to my mind over and over again. And, you know, you talked about delayed gratification, right? Being mature and act your wage delayed gratification, you know, strategic frontal lobe cerebellum, sort of strategic thought process. Right. Don't spend everything you've got. Don't go into debt spending. Right. That just makes sense. So, Dave, Jim, Ron had said, quote, that I just love. And he said something like, we must all suffer one of two types of pain, the pain of discipline, which is what Ramsey is saying or the pain of regret and disappointment.

Merrit Strunk:
So if you suffer the pain of discipline now you pay yourself first you invest. You keep a strategic, long thought about your wealth management. You don't go into debt. You do all those great things that we should do. So there's the pain, the discipline now. So that you keep away from the pain of regret and disappointment. And one of those could be your living off Social Security. Or that you don't even have Social Security. So you want to keep away from that scenario by doing what you need to do. Now, I just love talking to our listeners that are in their twenties, that are young folks, and they're doing it. They're putting away money, they're systematically investing, they're growing their wealth, they're watching their debt. I just love that because I know when we do the projections, I see them having an extraordinarily amount of wealth in the future if they continue to do these things right. So they're delaying instant gratification, very unlike California ish, right? Very on California ish. Delay, instant gratification. Not spend, spend, spend paycheck to paycheck. Are you kidding me now.

Producer:
And in their twenties, for heaven's sake, that's a I wish I knew that and practiced that when I was in my twenties, for crying out loud.

Merrit Strunk:
Right. Right, absolutely. So they're doing what they got to do. So right now, I'm going to try to decipher what's going on with this market fluctuation, the big sell off yesterday, and relate it to inflation. Basically, the economy and the employment situation has been strong, runaway, strong, but at the same time, the government policies and runaway spending, deficits, spending, turning on the printing press, those in combination have led to inflation, things costing more, things costing more. And it's one of the biggest things that can derail a retirement, even a retirement that's not yet reached because it's costing you more. It costs you more for everything you need to do. And I always call inflation is the secret partner that erodes your retirement dollar. So this these these stats I'm going to share with you on the show today come from the US Bureau of Labor Statistics. The annual inflation rate in the US is for the second straight month to 8.3 in August of 2022 here, the lowest in four months from 8.5 in July. But above that's the problem that comes in above the market forecast of 8.1. People wanted to see it lower. The energy index for inflation increased 23.8% below the 32.9%, and July still 23.8% for energy inflation. Ee Ouch, ouch. Right. That's a hurting even more so in the California market where I believe it's between four and 9%, there's an astronomical percentage increase in your energy costs. So when folks come home, they come home.

Merrit Strunk:
Do not wash the clothes, do not run the air conditioning. They're there unless they want to pay, you know, exponentially higher percentage of energy costs. Smaller increases were reported for gasoline costs, 25.6 versus 44. And fuel oil, which, you know, the Northeast uses fuel oil, 68.8 versus 75.6. Natural gas up a little bit, 33% versus the 30.5%. So natural gas has gone up. And my personal feeling on that, it will continue to go up. We're exporting over to Europe, into Germany. While Russia has turned off the Nord Stream pipeline, costs are going to go up and electricity 15.8%, the highest since August 1981, 1981. Electricity inflation, 15.8%, the highest since the eighties. Wow. On the other hand, inflation rose for food, 11.4, the most since 1979. Food inflation highest since 1979. And shelter that means home 6.2, the most since 1984. An interesting one. Used cars and trucks. Inflation is 7.8. So compared to the previous month, consumer prices were up 0.1% following a flat reading in July and compared to the forecast of a forecast expectation of 0.1% drop. So we didn't see that and that's what happened. So. The Fed's mandate is around controlling inflation and employment. So the administration has turned on the printing presses. That's deficit spending. And the latest inflation bill that they just passed is anything but that. It's like writing a bill that says we're going to mitigate the heat and the the spiciness of jalapenos. And you say this is the bill to decrease the spiciness of jalapenos, and yet jalapenos are spicy.

Merrit Strunk:
You can just name it whatever you want. It's just not going to happen. Give a pretty you know, it's putting lipstick on a pig is what this is. Because the latest inflation bill they passed is about taxes and the IRS. We talked about that on the show before they get the funding for 87,000 new employees for the IRS. And of course, they're going to have nothing to do. Right. There's no this isn't about taxes. We're not going to increase taxes, are we? We're just hiring an army for the IRS. This comes from an article from the Budget Senate Govt Ranking Member NEWSROOM. According to the CBO, that's the Congressional Budget Office. In the past, by the way, I've mispronounced that. I said congressional business. I think it's the Congressional Budget Office. Their analysis, according to them, that's the source for this, the proposal or the bill on this. The inflation bill is negligible at the very best. The estimates range from reducing inflation by 0.1. So not even a 1%. Not even I mean, we're talking 2/10 of a percent to increasing it, increasing inflation. This was a bill that's called it's going to counteract inflation. It turns out it's not really and actually could increase inflation 0.1% in the near term. This is from the Congressional Budget Office. The idea that this tax and spend proposal is going to blend inflation is yet again rejected by the CBO.

Merrit Strunk:
Interesting. So what we've learned today from the CBO, the bill does not lower inflation. It hurts economic growth. So the Fed is, again, their mandate, lower inflation, address unemployment. And what they're doing right now is they're drying up liquidity. They raise lending rates. It's going to dry up the ability of money. Borrowing money is more expensive. If I'm a corporation, I want to expand operations and I want to invest in new things or employ more people. And borrowing money to do those things so I can grow is becoming more expensive. I may not do that. So. Inflation economy, I mean, sorry, economy and production is contracting. That's a recession. So we're going to reassess that. And they are dumping off corporate bonds off its balance sheet. So they're throwing them back. So to bring down inflation, it's not going as quickly as they thought as we just covered. And my opinion is that they should have started much earlier, but it was politically not acceptable at that time to do that. And they did want to rock the boat. But now, look, they they kick the can down the road and now we've got to do it. And they may go more draconian than the market wants them to do. Everybody expects 70, 75 basis points. They may come in like we talked about. There's a, you know, a little little over a quarter of traders who think that's going to come in at 1%.

Merrit Strunk:
So the market was expecting less inflation. The market dropped. The stock market dropped, as we said yesterday. And in some way, that was the fear that the Fed will go stronger, more hawkish. Okay. So if the market's going down and the Fed is going stronger, is there some way to interpret this as what are your opportunities? I think it's a great question for folks listening here. What are the opportunities in this? Are there any opportunities in this? So what I would say is review your risk tolerance and your risk exposure of your investments. If you're older, you're in pre retirement or retirement and you look at your investments and you said you suffered somewhere in the range of a 16% to an 18% today, year to date, the market's down, S&P 500. To date, that means you've got 100% exposure to market volatility to the downside of market decrease. And you've got to ask yourself, is that appropriate, is that needed? And then you have to ask yourself, is why am I in that position? Why am I in that position that I've lost? I've kept step with 100% of that market down downside. And I would submit to you that that's probably unnecessary. It's a very good chance. It's unnecessary. So we've spoken before here as smart inspection and smart review. Get a smart inspection, a smart review, get an unbroken retirement review of your current situation and make sure that you don't have unnecessary risk in your plan and your investments.

Merrit Strunk:
Is not cool. It's no bueno. The other one is tax loss harvesting. For some people, this is going to be a new concept. For other people, they totally got it. And yeah, inflation is out of your control, but your taxes may not. So we can control what we can control. Right? So high inflation impacts savings and the real value of money and potentially limiting your ability to save and paying for retirement. Did you get that potentially limiting your ability to save for retirement if you're spending more money on everything? But what about the impact of taxes layered on top of an additional annual cost? So while you can't control that inflation, you can't control the helmet's exposure to your tax bill. Right. And that's good for your health. So we often use tax managed portfolios that aim to provide tax alpha to a portfolio. That's probably for a lot of folks that's like, oh, you said some stuff there. That's pretty weird. What do you what are you talking about? Tax managed portfolios, portfolios that are aimed at mitigating taxes in the way that it's managing and the movement of the holdings. Inside of that, we can provide alpha, which is positive gain to the portfolio, so less taxes paid on the gains is more gain you keep. It's just math. You pay less in taxes, you get to keep more. Okay. So if people who who don't have tax wise or tax managed portfolios end up paying more taxes on their gains, I hope that makes sense.

Merrit Strunk:
In tax loss harvesting processes. There's about three steps here or so. So selling securities that have lost value. Selling when you're down doesn't sound good. Want to walk away? I'm confused. Merritt, what are you talking about? Well, that's where the mind that you have gains to some someplace else. So you can. You can sell a position where you've lost value using the capital gains loss to offset capital gains on other sales where you may have gained. So replacing an investment where you've exited with a similar but not too similar, that's catch their investment. To maintain the desired investment exposure, you're exiting and reentering at a lower price. You may be taking a loss or you may be taking a gain. And we're just going to wash it. We're going to wash it. So there's an opportunity, so an opportunity for your risk review as smart inspection and then also an opportunity to do tax loss harvesting. And by the way, when you have losses, you can carry over those losses for a certain period of time. So you can do that and you can use that on your taxes in in future years. So if you're surprised at the loss of your investments, then something's not right. Give us a call. Go to our website. The phone number is 858521 9700. Or you can click the button there. It says complimentary consultation.

Merrit Strunk:
And if you don't have active tax loss harvesting going on in your account, call us to discuss that to see if it's a appropriate strategy for you and that you can get tax alpha, which is percentage gained by having to pay less taxes. If you like one of these shows, like a lot of other of our listeners and like the lady that called up that was just spitting mad. My mom used to say, I'm so mad I can spit. She was spitting mad. I'm so mad I could spit. I could hear my mom saying that. That's probably because I did something wrong. I was a kid. I frequently did that. I love my mom. She is fantastic. Mom. Thank you, mom. Thousand hugs and kisses. You're the best. If you're if you're frustrated that your big financial companies, they're not calling you back, you can't get a hold of them. You've lost money. Figure out what's going on. It's just a smart move for you to do. And that brings us to the end of our first segment here. We're going to take a break and then we're going to come back. And when we do, we're going to talk about smart health and what is smart health in retirement. And there are some things you've got to know because it can be rather complicated. So call us. Join us back again. And you can go to our website WW Retirement Unbroken and check us out.

Producer:
You're listening to your retirement Unbroken. To schedule your free no obligation consultation with merit visit retirement unbroken dot com.

Producer:
Social Security will get a big cost of living adjustment next year, but there could be some consequences you might not have considered. I'm Matt McClure with the Retirement Radio Network, powered by a merrill Life. A new report by the Senior Citizens League says Social Security beneficiaries could see a cost of living adjustment or COLA as high as 10.1% next year. The reason, inflation running at a 40 year high.

Mary Johnson:
This is a very, very unusual and unprecedented pattern of inflation that we're experiencing.

Producer:
Mary Johnson with the nonprofit group, told WBTV TV that surveys show inflation has caused about half of Americans to spend their emergency savings and people are carrying more debt on their credit cards. So the highest jump in Social Security payments since 1981 would be a good thing, right? Well, Johnson says it's better than no increase, but there are some things to be aware of.

Mary Johnson:
In fact, you can get penalized if you think your tax liability is going to be 10% more next year than you're paying now. You can be penalized if you don't send in estimated payments or have more money withheld.

Producer:
She told the TV station. The increase would not be enough to cover a jump in Medicare Part B premiums, which are taken directly out of Social Security checks. And she says higher incomes mean some seniors could no longer be eligible for some other government benefits.

Mary Johnson:
And then a whole 15% were made ineligible because they were their incomes increased over the income limit for food stamps or rental subsidies or the programs in their area.

Producer:
So what should you do? Johnson says Prepare now. Talk to a financial adviser to help you get ready ahead of time and contact local nonprofits if you need help paying bills. So are you prepared for the unintended consequences of a larger Social Security check? That's a key question to consider as inflation impacts all our lives. With the Retirement Radio Network powered by a micro life, I'm Matt McClure.

Merrit Strunk:
Welcome back again to the Retirement and Broken Radio show and podcast. I am Merritt Strunk and we just got through talking about and deciphering and unpacking the inflation and that we're experiencing in the United States and also how that's impacted the market recently of the recent very large sell off. And we also talked about what those opportunities could be for you. So if you want to check that out, like I said, give us a call, go to our website. So the next one we're going to talk about, it's such a huge deal. It really is for people and for for the younger folks on here. It may not be yet. If you're not looking at retirement, then it may not be something that you need to consider. However, you'll be fun at parties and you could provide some real value to your parents as they enter this situation here. So we're going to be talking about what is smart health. All right. We're going to be talking about Medicare and make sense of the different parts and options that are available to people. So how big of a deal is this? So there are, according to the National Committee to Preserve Social Security and Medicare 2020 here, more than 61 million Americans are covered by Medicare health care plans right now. Let's just say it, that's a big deal. 61 million Americans and health care is a big deal. So four out of five I'm sorry, four out of ten Medicare consumers are also enrolled in what's called Medicare Advantage. That little stat right there comes from the Kaiser Foundation Family Foundation in 2021. And then of a survey, that single care Medicare survey and 2022 did, 65% of respondents said that they would not know which parts of Medicare they should enroll in. And I'll just tell you, it's confusing. It is confusing. Do I do what's on television that that that Joe Namath is talking about? Is Joe Namath right? It mad. Isn't that Joe Namath on.

Producer:
There's Joe Namath. Isn't there one too with the guy from one of the guys from good times. I feel like Kid Dynamite. Yeah. Dynamite that. Yeah, I see that one all the time too.

Merrit Strunk:
Yeah. And they're rotating those and so, you know, should they do that? And so for 2020 to 2022, Medicare beneficiaries of Access 39 Medicare Advantage programs. So there's 39 different Medicare Advantage programs out there. And that that stat comes from the Kaiser Family Foundation as well. So 89% of Medicare Advantage plans offered in 2022 include a prescription drug drug coverage. Same, same data. And 18.5, the US population is on Medicare. So let's just say that's close to 20%. So clearly, guys. This is important for you. Those of you who have never even you don't talk about Medicare, you don't think about Medicare. What happens when you're through working and you retire the government's insurance plan so you're no longer have private industry, you know, employer plan. Now you are on the government insurance plan, which is called Medicare. And because of that, super important. So let's try to unpack what those different parts of this is there. First one is Medicare Part A, and that's also known as hospital insurance. So that covers inpatient hospital stays, skilled nursing facilities, facility care. And by the way. There are some ins and outs of that stuff.

Merrit Strunk:
Hospice care and some home health care. There's ins and outs of those things and you have to understand them. So, for instance, I believe one of those gotchas is if you went into the hospital and you were staying there for for some time and then you needed rehabilitation or you needed a skilled nursing facility right after that to to recover. If you simply got, you know, you checked out of the hospital and went home and then you said, you know what, I am not able to be at home. I think I need some, you know, some rehabilitative care. Now, it's too late now. Medicare won't cover that. You're supposed to go from the hospital room to that rehabilitation place. But if you checked out and you didn't go there right away, then Medicare is not going to cover that. That is my understanding. So it's a bit of a tricky road. You've got to know the rules. And believe me, all of these hospitals and doctor's office, they know the rules. You always have to get things checked out first before you make a move.

Producer:
And that particular part, I will say from just because my dad spent a lot of time in the hospital last year before he he passed away earlier this year, and that was he was going to go into a rehabilitation facility and all of that. That's absolutely true. If he were to go directly there, fine. Check out check back in. Know that that's so that's true from personal experience here on my part.

Merrit Strunk:
Thank you, Matt. And yeah, I've seen it in real life as well and it's possible you could get hospice care, but they're not going to provide the same thing. If you if you go home and get hospice care, it's not going to do the same thing as the real rehabilitation sort of thing. If you get part A, it's premium free. You can get it premium free at 65 years old. If capital, if you or your spouse paid the Medicare taxes for a certain amount of time while you were working, you're already get retirement benefits from Social Security or the railroad retirement board. You know, we're talking about a very small percentage of the population at the railroad retirement board. They just been around in America forever. So there's special things that go on with the railroad retirement, folks. You are eligible for retirement benefits but haven't filed yet or you or your spouse have had Medicare coverage, government employment. So that brings us to Medicare Part B. Part B is known as medical insurance. And by the way, you can find this off medicare.gov. It's known as medical insurance. And it covers certain doctors services, outpatient care, medical supplies and preventative services. So some people automatically get be, but others may have to enroll. You could be subject to a late enrollment fee if you don't sign up for part B when you first become eligible. So there's there's this open eligibility enrollment period that happens every year.

Merrit Strunk:
Got to pay attention to that. However, unlike Part A, you will definitely pay a premium for part B, part A, you may not have to pay a premium. Part B you definitely have to pay a premium. And if you have this, you know that you go to the doctor, you've got to pay your premiums for that. So part B, premiums are typically deducted from your Social Security benefits. So if you're getting Social Security and retirement no longer work, now you have Medicare. How do you pay those premiums? Well, the government's going to make sure they take it out of your Social Security benefits before your check hits your checking account. They're going to get paid. Okay. What? I mean, in general, these things Medicare covers about 80% of the bill and 20% is yours. But a lot of people go ahead and get that Medicare supplement. It's called mid sub for short. They get a supplement from a third party and they cover that 20% that is normally not covered. Okay. That brings us to Medicare Part D. And again, this is on medicare.gov, if you. This is also known as the drug or prescription coverage. So plans cover a wide variety of those prescription drugs. And folks, when you get older and you've got squishy parts inside, you've got different ailments, you're taking meds. Right. Everybody repeat after me. Atorvastatin. No, I'm kidding. It's Atorvastatin. That's a vocabulary word of the day, kids.

Merrit Strunk:
Atorvastatin. There's a teacher who takes care of some aging parents. Right? Right. Atorvastatin on the board 20 times. So there are protected classes of certain drugs that treat HIV and AIDS. That's that most planes do cover the plans. List of covered drugs is called a formulary. So it's a list of drugs that it covers called a formulary. So if you get a drug and it's prescribed to you and it's not on the formulary, you have to check out some stuff. Part D plans have drug tiers. This tier, this tier, this tier covered a certain level. So lower tier drugs cost less than higher tier drugs. How do you know you have a higher tier drug? Well, if there's only one option as a brand name, you have a higher tier drug, right? What do you pay for in part D, you do pay for a premium yearly deductibles, co-pays and co-insurance, coverage gap costs. That's that Medigap coverage costs help cost, extra help cost and late enrollment penalties that which may be permanently added to your premium. So why would you pay a late enrollment penalty if you don't enroll in Part D during your initial enrollment period? There are 63 days or more where you don't have Medicare drug coverage or other credible prescription drug coverage. You want to make sure that you pay attention to these enrollment periods and make sure you do it on time. So we mentioned Medigap Med sub supplement insurance versus what you might see on television, which is the Medicare Advantage plans.

Merrit Strunk:
These types of insurance are designed to fill gaps and part A and part B plans. You can't have both. And that's a can't, not a can. It's a can't have both. Both of the Medigap and Medicare Advantage. At the same time, 48% of beneficiaries pay for Part D coverage. And this comes from Investopedia and that data point there. So Medicare Plus, Medigap, now you got it covered. So it could be more expensive than other plans. It covers hospitals and doctors that have Medicare and no need for prior authorization or referral from your primary doctor, which is really cool. So covered. It gets coverage anywhere in the US, which is great for people who often travel, so don't have to worry about that because some private plans are not okay with that if you travel and it's good for people have specific doctors or hospitals they want to use. When you come to the Medicare Advantage, just right before we're here, we covered Medicare and Medigap. Now we're covering Medicare Advantage. And those are the ones you see on television. It's also known as Part C will either have no premium or a lower premium than Medigap plan. Medicare Advantage plans cover hospitals and doctors and often include prescription drug and other coverage, other benefits and things not included in parts A and B, you might hear Joe Namath or a Kid Dynamite on television that says even rides to doctors, you know, and then they say, I search my zip code and I got money back into my Social Security, you know, that kind of thing.

Merrit Strunk:
Check it out, folks. Really be careful. There's a reason why they are advertising this to you. Medicare Advantage operates as a HMO, a health maintenance organization, and limit people who are covered by this plan to doctors and hospitals. What's an HMO to? It's a network. So you've got to get the services within your network. Okay. So we covered the Medicare and the parts and unpack that in. For those of you who are not 65, that might have been a lot to to sit through. And you're you're trying to catch it and go, well, how does that work for me or how does that work for dad? Or What does mom and dad have? Or What does Grandma Grandpa have and do they have it right? Frankly, guys, for the younger generation who might be listening to this show and driving in their cars, your your older parents could be quite confused on this, not do their enrollment during that period, not have the best coverage. How do you know you don't have the best coverage when there's a service that you need and it doesn't work with your plan. That's how, you know, you may not have the best one and different plans cover different benefits to that. Oc Smart Care what what is smart care in retirement we're we're going to unpack that a little bit more than two thirds of all Americans will require some sort of long term care or assisted living during the retirement years.

Merrit Strunk:
That's a stat that I used in our last show in general, the source for that is a gender study, but it's on a lot of other ones. And this says two thirds. And generally I think I've quoted maybe 70% of us will need long term care, whether you agree with that or not, statistically and from the research, that's what it says. How can you plan to handle the exorbitant cost of long term care and assisted living? What I mean by exorbitant cost at long term care, when we do projections, when we're talking about people who might be younger, the exorbitant definition is an astronomical amount of money. Tens of thousands of dollars per month, when you're talking about older folks, is not as many tens of thousands, but it could be 10,000, 14,000, 15, 16,000. And sometimes it's a heck of a lot. What I tend to say when I look and I talk about long term care because it's a it's a bit of a morbid and yucky. Conversation with folks. But it is a cornerstone of estate planning and financial planning these days. We are living longer whether you want to or not. And, you know, I said in a previous show, I said that dementia is nearing epidemic proportions.

Merrit Strunk:
And I look that up and it is about there is a new case of dementia globally about every 3 seconds. And then I was like, I'm sorry, I was wrong in what I said because it just doesn't do it justice. It's beyond epidemic. So you may think, Oh, I don't want long term care, and you think you're one of those folks that won't need it? And you say, Hey, honey, like I say, just take me out on the highway and tell me to go jogging. You know, at that age, you know, I don't need long term care there in these memory care facilities. There are a lot of men that just forgot that they said something like that. They have dementia. So from that same Jen work study that I mentioned, and it's a 2021 study from Jen Werth, the average hourly rate for home health was 2720 $7 an hour or $61,776 annually. That's a lot of money. And if you don't have that money, what are you going to do? You become a ward of the state and you're in the Medicaid program. You will not like where they put you. So it's better to have these plans ahead of time. The annual median cost for a private room in a nursing home is $108,405, the annual median cost for assisted living. So not not nursing home, but assisted living is 54,000, with monthly rates ranging from 3000 in Missouri more affordable to $6,978 monthly in the District of Columbia.

Merrit Strunk:
So it does depend what state you're in, the more affordable states, by the way, top of mine, Alaska, New York, California are some of the highest that came right off the top of my mind. Their overall cost of care increased from 2020 to 2021. Why increase usage of PPE? That's the preventative care, the outfits they wear, the mask and things that were so hard to get by health care professionals and enhanced training protocols and medical facilities due to COVID 19, as we saw. That's one of the reasons, and that represents a small portion of the 2021 increases, but it's expected to dissipate over time. However, medical costs do increase. They have an inflation rate over time. The main driver really is supply and demand. And we're living longer and medical costs every day until 2030, 10,000 baby boomers were turned 65 and seven out of ten will require long term care at some point. How do you like that again for you compliance people out there that is from the 2021 gen were study. There are high turnover rates and insufficient supply of professional medical professionals to meet the growing long term care demand and around COVID 19 pandemic you know but hopefully now they're it's even amplified actually by exposure, risk and opportunities and more competitive salaries. Just try to get a specialist appointment. It's a tough deal. And if you're dealing with doctors and appointments for your aging parents, you know this is true.

Merrit Strunk:
So the main takeaways here is Medicare does not cover long term care needs. That's a common misperception. Medicare, the government insurance program, will not cover long term care needs. So life insurance policies, annuities offer benefits to those needing nursing, assisted living or other long term care situation. It's interesting, as I remember, even though those stats come from Genworth, I remember Genworth kind of walking away from the long term care market at some point going the cost are just too expensive. So there are long term care policies out there. Actually, when it comes to long term care, in our own practice here, we deal with a specialist in this area who shops policies nationally for people. And the other deal is what if you didn't do your planning? What if you didn't do your long term care plan? It's not part of your plan. And here you are. Let's say you're 73 years old and you do not have a long term care policy. What are the options for you? There are options for you that don't require certain things at the long term care. Conventional policies do, and there's ways around that, but it's not available for everyone. So assisting assisted living care and that's not long term. Assisted living care is 2.7 times more expensive than adult day health care. Day care. So if you're concerned about it all, about the care that you may need and by the way, husbands, wives, just think about this.

Merrit Strunk:
Women on average statistically live longer than men. At some point, you've got to I mean, you're going to do your job, men for your family and your wives. You're going to have to talk about this. You don't want to talk about it. Rationalize moneywise. You don't want to talk about it, because if you don't. Statistically, I'm going to tell you right now is the geographically closest female child. That will then end up caring for one of you. And that daughter is going to put her hopes, dreams and aspirations, raising her family on hold and maybe become as sick or sicker than than the person she's taking care of. And it's just not fair. So do do your job, guys. Ask yourself these questions. Talk to somebody about long term care. Call us up. At least get in, get informed and get educated on the cost and the situation, what the options are. Okay. So we're going to wrap up this segment here on on Smart Care. And I'm going to ask you to come back here and join us. We're talking about smart reinvesting and what that is. Is this something that's right for you? During the break, please log on to our website for retirement unbroken dotcom. Look at that complimentary consultation. Get our phone number 858521 9700 and give us a call. We'd love to talk to you.

You can. There's been no time to talk.

Producer:
Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Merrit Strunk:
All right. Welcome back from the break. This is the retirement and broken radio show and podcast and I'm Merrit strike and boy we have had a information and data packed show here. Next, we're going to be talking about smart reinvesting. There are some folks right now, particularly right now, given the situation where we've got the high rates and the market is haywire and folks are like, well, what if I have conservative money that I want to put on the side and not risk? There are some ways that can happen. And also, what are some of the other methods or strategies you can put to work with the market situation? So a lot of retirees don't reinvest the money they receive, but it might be something that they should do. You've got to be careful to make sure that you don't run out of money. That feels like I'm stating the obvious, doesn't it? You do not run a run to run out of money. It's one of the worst things. Matter of fact, there was a research study a long time ago that said seniors fear running out of money during their lifetime more than death. You may not be advised to put all your money into your checking account and then to spend it, put it in net regular savings.

Merrit Strunk:
It's nice to look at. It's pretty and it's, you know, it's your baby. It's it's just gorgeous. But with inflation, the way it's happening right now, it's actually going backwards in value, isn't it? So if we've got 8.3% inflation and you've got a bunch of money sitting in your savings account because you don't want to put it at risk and it's actually going backwards in value right now due to the high inflation. So all we're saying here is, is are there ways to to make sure that your hard earned money is working hard for you? Okay. So consider reinvesting into a taxable account for tactical asset allocation we've talked before. Matter of fact, I think it might have been in our last show about what a tactically managed portfolio would be. So in doing that, you also have to be careful that you don't expose yourself to short term capital gains. If things go bad, we've got to get out because we're protecting your wealth. And now you may get a short term capital gains in doing that. And if you're rebalancing all the time, you know, if you do it yourself, you can you can run into that situation. So you might be better advised maybe just to rebalance once a year and that'll put you in a better spot.

Merrit Strunk:
So putting money into checking savings or a CD is feeling a lot more like melting ice scenario. There are there are there is an animal, not an R. It's it is an animal. The acronym is MIGA, my g g a it is multi year guarantee annuity and these are short term. And think of it as a CD, very CD like except you don't have the FDIC insurance. The safety of that is guaranteed by the carrier that that carries that policy. So just imagine, say five year, a five year MIGA or a short term fire or a three year MIGA, you put money away much like a CD. It's growing at a compound rate that's guaranteed. So a lot of people don't know these. I always say when people are interested in something like this and they want this as a part of their portfolio is like, let me explain it to you with simple visuals. Yes. Not only the math and the the forecast, but I like this. I heard this the other day, Matt. And I truly I truly believe this. And so so when I'm getting exposed to new concepts and things, I say explain it to me. Like I was a Labrador retriever that speaks only Spanish.

Producer:
And it really spell it out.

Merrit Strunk:
If I can understand that. I think everybody else can, too. So the main takeaway here, I think, is that when it becomes money you don't want to put in the market during crazy times. There are other options there and there are pros and cons to each one's. And really we'd have to calculate it out with math and prove the pros and cons to you. So. So, yes, the market is a little crazy right now. Yes. Inflation needs to get under control. Yes. That you need to understand your Medicare that we covered earlier in the show. And now there are some more conservative options for your money that have market upside potential that can get some compound rates of interest. So this was a show that was full, full, full of information. I hope you enjoyed it. My name is Merritt Strunk and this is the Retirement Unbroken radio show and podcast as normal. Check in with us at 1 p.m. on Saturdays on 1170 AM and 96.1 FM. And we'll see you the next show.

Producer:
Thanks for listening to your retirement Unbroken. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard earned assets to schedule your complimentary no obligation consultation with merit. Visit retirement unbroken or pick up the phone and call 858521 9700. That's 858521 9700. Advisory services are offered through Momentum, Financial and Insurance Services LLC, an investment advisor in the State of California. Insurance products and services are offered through merit, strong and independent agent. California License number 07510. Certified Financial Fiduciary is a federally recognized professional certification.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including advanced search, automatic transcription software, automated subtitles, upload many different filetypes, and easily transcribe your Zoom meetings. Try Sonix for free today.